The National Energy Regulator of South Africa (Nersa) has announced that it has approved the following electricity tariff hikes over the next three years:
- 2019/20- 9.41%
- 2020/21- 8.1%
- 2021/22- 5.21%
Eskom originally applied for price hikes of between 15% and 17%. The power utility is R420bn in debt and cannot service its loans from its current revenue. The state energy utility is effectively paying interest on their loans with loans. National Treasury announced major restructuring plans in February 2019 which includes a R69bn lifeline for the power utility over the next three years.
Eskom’s dire financial position has largely been as a result of gross mismanagement, corruption, an incompetent and bloated staff compliment plus massive budget overruns on new build coal power stations, Medupi and Kusile.
To date there has been no consequence for those that have been implicated in corruption at Eskom despite prima facie evidence submitted to the country’s Commission of Enquiry into State Capture and other regulatory authorities. Against this background, the tariff increase announce for the next three years may be a bitter pill for the people of South Africa to swallow.
Author: Bryan Groenendaal
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